People rely on many and for millions of Americans, Social Security is one of them. However, there has been a few changes to Social Security this year and many people are concerned about their retirement. Let’s see what Google has to say about the best retirement strategy.
Important Changes This Year
- A Small Raise in Benefits
Your Social Security benefits went up by approximately 2.5% as a result of the annual Cost-of-Living Adjustment (COLA). Yes, even though it’s not such a major increase, this is designed to help beneficiaries keep up with the rising costs of the economy.
- Public Employees Get a Fairer Deal
The government finally repealed the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The WEP reduced Social Security benefits for individuals who also received a pension from a job that did not contribute to Social Security. Teachers, law enforcement officers and other government employees were impacted by this.
The GPO impacted spousal and survivor benefits, which reduced or eliminated benefits for those who received a government pension.
Now these employees are able to collect the benefits they are entitled to.
- More Freedom to Work and Earn
Another change is that you can now earn money without having your benefits decreased. In simple terms, you can look into a part-time job for extra income while collecting Social Security.
The Best Strategy You Can Follow for Retirement
There are a lot of different strategies out there, but here are a few of the good ones:
- Delay Collecting Your Benefits as Long as You Can
The most important one is to delay claiming benefits. Yes you can start claiming benefits at the age of 62, but this would mean that your benefits are reduced permanently.
- At 62: You’ll get a reduced benefit, as much as 30% less than your full amount.
- At Full Retirement Age (67 if you were born after 1960): You’ll receive 100% of your earned benefit.
- At 70: For every year you wait after full retirement age, your benefit grows by about 8% per year.
For anyone who can afford to wait, delaying benefits is the smartest financial move you can make.
- Married? Coordinate Your Benefits
When it comes to marriage, time is everything. Delaying collection till age 70 is the most
If the higher-earning spouse passes away, the surviving spouse will step into a larger benefit for the rest of their life.
- Public Employees: Take Action Now
With the WEP and GPO being eliminated, public sector employees are entitled to their full Social Security benefits plus their pension.
In order to make this happen, beneficiaries must call the Social Security Administration (SSA) and update their records so that their benefits are recalculated as a result of the repeal. You worked hard for the benefits, don’t miss out.
Where You Live Still Matters
As much as you can implement smart strategies to have a peaceful retirement, the area that you live in also makes a difference, let’s see which is the best state:
Google says Florida is.
- No income tax – All of your Social Security benefits, pensions and retirement savings withdrawals, are tax free.
- Sunny weather – Florida boasts warm weather all round.
- Plenty of affordable towns – Cities like Ocala, Port Charlotte, or Gainesville offer a lower cost of living.
There are other cities such as New Hampshire, Texas, and Wyoming if you aren’t happy with Florida. These states also offer zero income tax. Avoid states such as Colorado, Minnesota, and Utah.
The Big Takeaways
Here’s what to remember:
- Wait if you can – Try and wait until age 70 to claim benefits so that you get the maximum out of your benefits.
- Coordinate with your spouse – Timing benefits smartly ensures both of you are protected.
- Claim what’s yours – Public employees must be sure to update their details with the SSA so that they receive the benefits which they are entitled to.
- Choose the right state to live in, make sure the one choose is easy on your wallet and your lifestyle.